Consider an exchange economy with two people: Chris and Denis. There are two goods in the economy: burgers (b) and hotdogs (h). Initially, Chris has 5 hotdogs and Denis has 2 burgers. Chris likes burgers only and Denis likes just hotdogs. Specifically, The utility functions of Chris and Denis are given as follows: uc = be and up = ho. The price of a hotdog is $1. What is the price of burger in the competitive equilibrium? a. 0 b. 2.5 O c. 1 Od. infinity Oe. 0.4

Consider an exchange economy with two people: Chris and Denis. There are two goods in the economy: burgers (b) and hotdogs (h). Initially, Chris has 5 hotdogs and Denis has 2 burgers. Chris likes burgers only and Denis likes just hotdogs. Specifically, The utility functions of Chris and Denis are given as follows: uc = be and up = ho. The price of a hotdog is $1. What is the price of burger in the competitive equilibrium? a. 0 b. 2.5 O c. 1 Od. infinity Oe. 0.4

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 19SQ

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